Focusing procurement action to maximise sustainability benefits Barbara Morton Director – Sustainable Procurement Ltd

Outline 1.Delivering sustainable procurement – how? 2.Prioritisation methodology 3.Steps in the process 4.Developing an action plan

What is Sustainable Procurement?

Delivering sustainability through procurement 2 Building Blocks of SPTF Flexible Framework Prioritisation Methodology –Risk-based –Helps focus resources Integrating sustainability throughout the procurement and supply chain management process

Flexible Framework Time Ambition Foundation Embed Practice Enhance Lead

Flexible Framework People Policy, strategy and communications Procurement process Engaging suppliers Measurement and results

Prioritisation Methodology Structured approach to assessment of spend –Risk –Scope –Influence Standard approach across the public sector Focuses resources in areas with the greatest potential to improve sustainability Deliver improvements in priority areas ready for UK to be amongst the leaders by 2009

Risk Based Approach Expenditure Environmental impact Socio-economic impact Existing activity Scope to do more Influence on the market Reputational risk

Priority areas Construction Health and Social Care Food Uniforms, clothing and other textiles Waste Pulp, paper and printing Energy Consumables - office machinery and computers Furniture Transport

Prioritise Action - Risk and Spend Risk Spend >0.5% Secure Cost DrivenAcquisition Critical

PRIORITISE ACTION

Buyer Approach - Scope and Risk Scope Risk Quick Win CampaignMarginal Transform

Market Engagement Strategy - Scope and influence Scope Influence Challenge Research & Development Encourage Pioneer

Risk - Expenditure Identify source of expenditure –Does it have the right level of detail? –Does the data capture historic expenditure? –Does the data capture forward expenditure? –Is it for order value or invoice value? –What period does the data source cover? –Decide on the single best source of commodity spend data to use for prioritisation.

Risk - Environmental Themes Emissions to air and water, waste to landfill Resource use Environmental quality Sub-Themes CO2 and methane emissions Other air emissions Emissions to water Waste to landfill Hazardous substances Materials Energy Other natural resources Water Biodiversity Local environment

Risk - Environmental impact Scored out of 5 based on: Scoring each sub-heading as high, medium or low Not all sub-headings will be relevant to each spend category Subjective judgement based on number and severity of impacts Examine impacts overall

Risk – Socio-economic Themes Health Education and Employment Communities and other social Sub-Themes Health Education Employment Community Developing world supply chains Diversity Other Socio-economic impacts

Risk - Socio-economic impact Scored out of 5 based on: Scoring each sub-heading as high, medium or low Not all sub-headings will be relevant to each spend category Judgement based on number and severity of impacts Examine impacts overall

Risk - Level of existing activity Scored out of 3 No existing activity scores 3 Identify initiatives, guidance and other relevant activity in existence for each spend area Judgement based on number and level of activity

Risk - Scope to do more Subjective score from 1 to 3 High scope scores 3 Score each of the sub-themes Judgement based on number and level of activity

Risk - Reputational Risk Scored out of 3 For each spend area reflect on the reputational risk e.g. –Organisational policy statements –Legislative pressure –Areas of NGO Pressure –Issues of perceived high impact (e.g. sweat shops) Judgement based on number and degree of opportunity

Scope to do more Reconsidered on its own due to great importance Scored out of 18 Assess scope for each sub-theme (Yes/No)

Influence with Suppliers Scored out of 8 Are the suppliers operating in a saturated market? Do we command a share of the sectors market, significant enough to invoke change? Do we typically represent more than 0.5% of supplier turnover in this market place? Does maintaining good relations with us reflect well in the eyes of clients? Does maintaining good relations with us reflect well in the eyes of society at large? By working with us do suppliers improve policy and practice? Do suppliers improve policy and practice through adherence to legislation? Do suppliers comply with our policies?

Summary Now you have a total for each spend area: –Amount of spend £ –Risk scoreout of 24 –Scope to do more scoreout of 18 –Influence scoreout of 8 Use these values/scores to determine overall priorities and plot approach matrices

Thank you for your attention Barbara Morton Sustainable Procurement Ltd For more information please contact: Tel: +44 (0)